On the first anniversary of the strategic restructuring, Dagong International Credit Evaluation Co., LTD. (hereinafter referred to as "Dagong International") is restarting with a new look, business recovery is accelerating, and the business volume reached 60% of the historical high in May 2020.
The rapid recovery of Dagong is mainly due to the transformation of Dagong in the past year under the leadership of central enterprises. In terms of governance structure, internal control system and compliance mechanism, Dagong has undergone a series of profound rectification, adjustment and optimization. This is not only the fundamental reason why Dagong International can resume its business and successfully restart it, but also the beginning of its new mission to undertake the "national team"...
Reborn and reborn to comply with the law
Where you fall, you have to stand up.
Dagong had been hit with regulatory penalties and the problem was compliance. In this regard, since the new Chinese government came into power, Dagong International has started from cultivating compliance culture, improved compliance inspection mechanism, and strictly adhered to the awareness of compliance bottom line.
Since taking office, Chairman Lv Bole has repeatedly emphasized compliance bottom line in daily work meetings, "Without compliance, everything is zero", "in the face of compliance problems, other is not a problem".
Since the PRC took over, Dagong has issued a total of 65 regulations, 45 of which are new. Since the beginning of this year, Dagong International has revised more than 30 systems. These systems involve compliance management, rating operation management, personnel turnover review and other aspects, and compliance is the core of these systems, which lays a solid institutional foundation for compliance management.
At important points of rating business, Dagong's compliance department participates in the whole process. The compliance department also strengthened the examination of conflicts of interest, systematically sorted out the shareholding ratio of shareholder units, and formed a conflict of interest database. At present, the compliance department has sorted out nearly 400 companies in which China's new investment accounts for more than 5% of the shares. The list is directly entered into the information system of the company. If the marketing personnel connect with these customers, the information system will automatically identify and reject them when placing orders.
In addition, Dagong has also established a major compliance reporting mechanism and a rule of one-vote veto, which can be seen that Dagong attaches great importance to compliance.
Meanwhile, in terms of building a compliance culture, Dagong emphasizes that compliance starts from the top. Despite his busy schedule, Mr. Lu took over as chairman at the end of April and passed a regulatory exam in July to obtain an executive qualification in the securities rating industry. The regulatory requirement for executive qualifications is three, but Dagong has six. In addition, 182 people of the company have obtained the securities qualification, and 20 people are required to enter the regulatory threshold. After the rectification, Dagong International personnel qualification far exceeds the relevant regulatory requirements.
After more than a year of adjustment and optimization, Dagong has formed a scientific governance structure with effective checks and balances on decision-making, implementation and supervision, and established a compliance and professional organizational structure and operation mechanism, which lays a solid management foundation for independent operation in accordance with the law and has been widely recognized by regulators and others.
Hard to practice internal skills, second entrepreneurship
Since its resumption in November 2019, Dagong's international business has gradually begun to improve. Compared with the total number of projects from January to May last year, the number soared from dozens to hundreds, generally recovering 60% of the peak.
The most important asset a rating firm has is its people. Before that, the turnover rate of Dagong International was as high as 66.7%, but after the entry of China Guoxin, it took a series of measures to quickly reverse the situation and retain a large number of business backbone. At present, the dimission rate of new employees in Dagong International is 7%, and the staff is basically stable.
Moreover, Dagong's workforce structure has been substantially optimized, with personnel qualifications far exceeding regulatory requirements. As of the end of April, Dagong International passed the securities rating senior management qualification test of 6 executives, three regulatory requirements; 68 employees are qualified to practice securities, and 20 are required by supervision. In addition, there are 182 employees with securities qualification, 157 employees with more than 3 years of experience in rating business, and 8 employees with Chinese certified public accountant qualification.
After the reorganization, the Marketing Department of Dagong International initiated the "Phoenix Plan", which made a lot of preparations for the market restart from the four aspects of talent construction, customer base construction, channel construction and service capacity construction.
Rating quality is the foundation for the survival of rating companies. China attaches great importance to rating quality after the restructuring of the State. 2019 is the year of Dagong's rating quality improvement, and 2020 is the year of deepening the rating quality improvement.
In the past year, Dagong International has issued more than 500 reports, a 30% increase over the previous year, not only surpassing the quantity, but also commendable in quality.
Dagong also pays special attention to the application of new technologies in improving the quality of its ratings. At present, Dagong International has built one library and three platforms, namely database and operation platform, analysis platform, customer platform, and has its own computer room and server. In addition, based on the strategic judgment that technology has a far-reaching impact on the rating industry, Dagong has relatively clear regulations on its investment in IT. For example, IT personnel should not be less than 10% of the total number of the company, which is relatively rare in the industry.
Rating the national team and pushing forward
The independence of Dagong's international rating has also become a concern for the outside world. Song Min, executive vice president of Dagong International, said in an interview, "The status of a central or private enterprise itself does not represent whether the rating is independent or not. The gene of compliance culture of a central enterprise determines the internal motivation of the enterprise to comply with the rules and implement the system, and ensures the independence of the rating operation through the process and rules."
In fact, it is the original intention and strategic positioning of the acquisition of Dagong by China Guoxin to ensure the impartiality and independence of ratings, improve rating quality and prevent systemic financial risks.
At the beginning of China's new strategic restructuring, it put forward higher requirements for Dagong's high-quality development, hoping that Dagong could improve the rating quality and strengthen international standards with the determination to start a second business, so as to become a rating agency with the assurance of supervision and investors and the recognition of the international community, respond to the "Belt and Road" Initiative, and maintain economic globalization and multilateral trading system.
As a responsible central enterprise, China Guoxin will standardize the exercise of shareholders' rights by establishing a scientific corporate governance structure, ensure the independence of Dagong International rating business, and become a model in the industry to support the independent business of its controlled credit rating agencies. On the other hand, within Dagong, all rating decisions are made by a review committee in accordance with the review process, rules and standards under a strict regulatory framework, and its independence is guaranteed.
Under the background of global economic and trade friction, credit rating has become one of the important means for some western countries to exert influence on other countries. China's credit rating industry should recognize the gap, face up to the reality, and be alert to danger in times of peace. Under the correct guidance of regulatory bodies, China's credit rating industry should constantly improve the technical level and quality of rating, enhance the credibility and influence of the industry, and strive to reach the goal of matching the strength of the rating industry with China's economic status as soon as possible.
In July 2010, Dagong International released the credit ratings of 50 countries and regions for the first time, becoming the first non-Western rating agency to issue a sovereign rating report. Now, as a "rating national team", Dagong has a clearer understanding of this point. It is striving to become a "rating agency with a global voice" and making contributions to the construction of a social credit system that meets the requirements of high-quality development.
